Correlation Between Real Return and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Real Return and Eaton Vance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Real Return and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Real Return Fund and Eaton Vance Atlanta, you can compare the effects of market volatilities on Real Return and Eaton Vance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Real Return with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Return and Eaton Vance.

Diversification Opportunities for Real Return and Eaton Vance

-0.46

Correlation Coefficient

Real Return  Eaton Vance

Very good diversification

The 3 months correlation between Real and Eaton is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Real Return Fund and Eaton Vance Atlanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Atlanta and Real Return is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Real Return Fund are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Atlanta has no effect on the direction of Real Return i.e., Real Return and Eaton Vance go up and down completely randomly.

Pair Corralation between Real Return and Eaton Vance

Assuming the 90 days horizon Real Return Fund is expected to under-perform the Eaton Vance. But the mutual fund apears to be less risky and, when comparing its historical volatility, Real Return Fund is 3.45 times less risky than Eaton Vance. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Eaton Vance Atlanta is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,360  in Eaton Vance Atlanta on September 12, 2024 and sell it today you would earn a total of  93.00  from holding Eaton Vance Atlanta or generate 2.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Real Return Fund  vs.  Eaton Vance Atlanta

Real Return Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Return Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Real Return is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eaton Vance Atlanta

Risk-Adjusted Performance

3 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Atlanta are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Real Return and Eaton Vance

The main advantage of trading using opposite Real Return and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Return position performs unexpectedly, Eaton Vance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eaton Vance will offset losses from the drop in Eaton Vance's long position.

The idea behind Real Return Fund and Eaton Vance Atlanta pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.